Correlation Between Visa and OPERADORA

Can any of the company-specific risk be diversified away by investing in both Visa and OPERADORA at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Visa and OPERADORA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Visa Class A and OPERADORA DE SITES, you can compare the effects of market volatilities on Visa and OPERADORA and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Visa with a short position of OPERADORA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and OPERADORA.

Diversification Opportunities for Visa and OPERADORA

-0.32

Correlation Coefficient

Visa  OPERADORA

Very good diversification

The 3 months correlation between Visa and OPERADORA is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and OPERADORA DE SITES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPERADORA DE SITES and Visa is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Visa Class A are associated (or correlated) with OPERADORA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPERADORA DE SITES has no effect on the direction of Visa i.e., Visa and OPERADORA go up and down completely randomly.

Pair Corralation between Visa and OPERADORA

Taking into account the 90-day investment horizon Visa is expected to generate 3.97 times less return on investment than OPERADORA. But when comparing it to its historical volatility, Visa Class A is 7.75 times less risky than OPERADORA. It trades about 0.13 of its potential returns per unit of risk. OPERADORA DE SITES is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,218  in OPERADORA DE SITES on December 30, 2024 and sell it today you would earn a total of  208.00  from holding OPERADORA DE SITES or generate 17.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Visa Class A  vs.  OPERADORA DE SITES

Visa Class A

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Visa may actually be approaching a critical reversion point that can send shares even higher in April 2025.

OPERADORA DE SITES

Risk-Adjusted Performance

Modest

Over the last 90 days OPERADORA DE SITES has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak basic indicators, OPERADORA sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Visa and OPERADORA

The main advantage of trading using opposite Visa and OPERADORA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, OPERADORA can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in OPERADORA will offset losses from the drop in OPERADORA's long position.

The idea behind Visa Class A and OPERADORA DE SITES pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.